Maintenance First: How Regulatory Disciplines Can Fix Land Transport Investment

Full economic regulation of the road network is neither necessary nor appropriate. But the disciplines that underpin economic regulation can and should be adapted to impose better disciplines on road network owners. This paper proposes a transparent funding waterfall on land transport investment: maintenance and renewals first, consistent monitoring of asset condition, and least-cost funding to meet that specification. Residual funding would be available for new capital projects and make trade-offs more transparent. The result should be a more efficient system, and lift New Zealand off the bottom of the OECD league tables for infrastructure value-for-money.